Last Friday’s job payrolls beat forecasts for a drop in US unemployment. With a result of 3.6%, American employment remains active, but not the creation of new jobs, which still does not exceed 500,000 new jobs.
The effectiveness of the Fed’s communication appears to be working. This means that after a 25bp hike to start the tightening cycle, the strength of the labor market will allow the central bank to pick up the pace. Monetary policy will be reviewed again this Wednesday even without clear forecasts. The household survey found that 736,000 people found work and the unemployment rate fell to 3.6% (from 3.8%), although the participation rate increased to 62.4% (from 62.3%).
Additionally, average hourly earnings increased 0.4%, with February revised flat to 0.1%. The only negative aspect was that the average work week fell from 34.7 to 34.6 hours. With around 131.1 million workers, six minutes less work is equivalent to the loss of production of 378.9 thousand full-time equivalents.
During the first quarter of the year, there were some fundamental tailwinds that could have attributed the appreciation of the US currency. One of the best correlated issues has to be the reversal of risk trends. Benchmark speculative assets such as US indices fell sharply for much of the early part of the year and the need for safety was quite intense at times. The scale of fear is often important for the dollar, as more measured fades tend to lead investors to be more discerning as to where they intend to park their capital.
Weekly market projections April 04 to 08.
EURUSD remains sold below 1.1050 and highs of 1.11. The preference is sell for the coming week until 1.1020 and 1.1010. After these levels we return to the buy scenario. There is no impact data for the week with this euro although we will be watching the progress of the negotiations between Ukraine and Russia.
GBPUSD remains sold below 1.3130. The preference is sell for next week until 1.3077 and 1.3060. Then at these levels we will go back to buyers.
USDJPY buyer preference. Above 122.50 buys are viable until 123.0. Once we get past 123.20 and 123.40 we return to the 124.0 levels. It is possible that on Wednesday the market will take profit with this cross due to increases in the Fed’s interest rate. Buy will still remain at prices between 121.30 and 121.50.
USDCAD remains mixed at these levels. Above 1.25 we expect the market to take a buy preference until 1.2530 at the maximum. Once above 1.2530 we return to 1.2550 on which we enter at 1.26. It is possible that the FED will be the one that boosts the dollar quotes this week. Below 1.25 we have sell to 1.2480 and extensions. This cross will be reassessed daily for possible direction change this week (from seller to buyer).
XAGUSD XAUUSD commodities are maintained with buy strategies preferably. Take profit is estimated for next week in commodities as a result of a possible return to confidence in the dollar. Silver is expected to drop to 24.40 and 24.0 before moving into buy strategies again. In gold, a correction is estimated to 1900.0 and 1890.0 to later become a buyer again.
BTCUSD and ETHUSD. The leading cryptos in the market remain in consolidation. BTC got the 48,200 to later attract new buyers around 45,000. Buyer currently remains between 46,000 and 46,800, ideally we expect positioning above 46,900 for new strategies. At ETH we expect 3500 for new buy entries up to 3670.0.